Political and Economic Instability in Pakistan causes concerns to its neighbour
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Issue Net Edition | Date : 23 Jan , 2023

“Thou shalt love thy neighbour as thyself”. Unfortunately, both the immediate neighbours – Pakistan and China – are hostile towards India however; the growing political and economic instabilities in Pakistan are a serious concern for India resulting in refugee problem, terrorism and nuclear weapons going in the wrong hands of terrorists. India’s motto of relationship with other countries is – Vasudev Kutumbakam meaning thereby that the whole world is one family.

The growing political instability in Pakistan cannot but be a source of concern for India. Former Prime Minister, Imran Khan—who survived an assassination attempt—resumed his long march to Islamabad to press for early general elections. He took on not just the ruling Shehbaz Sharif-led administration but also the army, which wields the real power in that country. The army considers the former premier’s charges as “absolutely unacceptable”.  Actually, Khan became PM with the help of the all-powerful army but fell out as he chose to go against the army. Interestingly, not a single Prime Minister in Pakistan has completed a full five-year term since the country’s independence in 1947.Throughout the history of Pakistan, chaotic conditions in political system remained resulting in poverty and terrorism.

Pakistan’s political tensions and Army’s direct interference in the political upheaval have resulted in serious economic fall resulting in high inflation, enormous unemployment of youth and poor foreign exchange reserves. The worst has been nature’s fury of floods in the country from June to October last year, which killed 1,739 people, 45,000 wounded and caused Pak ₨ (PKR) 3.2 trillion ($14.9 billion) of damage and PKR 3.3 trillion ($15.2 billion) of economic losses. Floods have also damaged over 9.4 million acres of crops and 33 million people became homeless. Extending “heartfelt condolences” to victims of the floods, Prime Minister Narendra Modi on August 29, 2022 said he was saddened by the situation, in a rare outreach to the neighbouring

Country. People of Pakistan expected financial and material aid from India but on humanitarian grounds but its raising of Kashmir issue in the UN Security Council during that time constrained India for any aid though it provided food and medical aids to most of the needy countries like Afghanistan, Sri Lanka, Africa, Ukraine and so on.

Due to political instability and high corruption especially in Army, Pakistan’s economy had a free fall from 6 per cent to 2 per cent of the GDP and due to this natural disaster, Pakistan’s economy further dipped to only 0.4 per cent of the GDP as per World Bank. Shehbaz Sharif government is finding it difficult to tackle the raging double-digit food inflation—wheat price inflation in rural areas has spiraled from 4.8 per cent in January 2022 to 38 per cent in July—which is bound to severely impact the living condition of the population. The prices of wheat, vegetables and fuel have skyrocketed. It is buying wheat and coal from Afghanistan at very exorbitant rates. Pakistanis are fighting for wheat flour (atta), dal, vegetables and fruits due to dire shortages food stuff as their rogue army diverts all funds to terrorists and shipping army brats to England, Australia and USA at tax payers money expense.

To be sure, Islamabad has secured loan pledges from its allies like China, UAE and Saudi Arabia. But servicing its massive external debt of $130 billion cannot be prioritised while it fashions a policy response to a climate change-related disaster. The forex reserves of the country dropped to $7.93 billion which is actually 0.0 per cent because China has contributed $2.3 bn, Saudi Arabia $3.2 bn and IMF $1.4 bn to shore up its forex. The depreciation of PKR exchange rate peaked at PKR 225 per dollar however, in the black-market PKR is 240 per dollar. The Pak government needs at least $5 billion for 2022-2023 on top of IMF loan but nothing seems to materialise. Debt servicing requirement is $34 bn this year.

Pakistan said on 9 January that donors had committed to give more than $8 billion to help it recover from last year’s devastating floods in what is seen as a major test for who pays for climate disasters. Officials from some 40 countries as well as private donors and international financial institutions gathered for a meeting in Geneva under the chairmanship of United Nations Secretary General Antonio Guterres who requested for massive investments to help Pakistan recover from what he called a “climate disaster of monumental scale” as Islamabad sought help covering around half of a total recovery bill of $16.3 billion.

Pakistan Information Minister Marriyum Aurangzeb said that pledges had reached $8.57 billion – more than it had initially sought. Among the donors are the Islamic Development Bank ($4.2 bn), the World Bank ($2 bn), the Asian Development Bank ($1.5 bn) as well as the European Union and China. France and the United States also made contributions .Let us hope that Pakistan eradicates corruption and does not utilise part of these donations for terrorist organisations rather than reducing its debts.

What does this imply for India? The prospect of a regime change per se does not matter but India cannot be immune to the dramatic developments unfolding in Pakistan. The last thing India wants is for the instability to spiral out of control into chaos and anarchy. A failing State is only a recipe for more cross-border terrorism and a more “active” line of control. It may cause refugee problem towards the neighbouring countries including India as it happened during the Bangladesh liberation war with West Pakistan in 1971, an estimated 10 million people of East Pakistan (present-day Bangladesh) fled the country and took refuge in India particularly in the Indian states of West Bengal and Indian North East region, especially Tripura and Assam. Since the beginning of the military coup on 1 February 2021, at least 70,000 Muslim Rohingya refugees fled Myanmar, and more than one million remain internally displaced from their homes.

Pakistan’s new army chief Gen Asim Munir has to play a key role in managing risks of conflicts with India on the East and Afghanistan on the West. Taliban government in Afghanistan has not accepted the Durand Line as the ‘official’ boundary between Afghanistan and Pakistan. The insurgent group Tehrik-e Taliban Pakistan (TTP) also known as Pakistan Taliban is an alliance of militant networks formed in 2007 to unify opposition against the Pakistani military. TTP’s stated objectives are the expulsion of Islamabad’s influence in the Federally Administered Tribal Areas (FATA) and neighboring Khyber Pakhtunkhwa Province in Pakistan, the implementation of a strict interpretation of sharia throughout Pakistan. Taliban is providing a haven to the anti-Pakistan insurgent group the TTP, which has killed thousands of Pakistanis and seeks to establish a Taliban-style, Shariah-compliant state in Pakistan. This has stunned Islamabad, which was operating on the assumption that the Taliban government of Afghanistan would be beholden to Pakistan out of gratitude for years of support during fall of Kabul but failed to do so.

Taliban militants in Pakistan will no longer abide by a months-long ceasefire with the Pakistani government. In November last year, the TTP called off an indefinite ceasefire agreed with the government in June 2022 and ordered its militants to carry out attacks on the security forces. The TTP, which is believed to have close links to al-Qaeda, has threatened to target top leaders of Prime Minister Shehbaz Sharif’s PML-N and Foreign Minister Bilawal Bhutto-Zardari’s PPP if Pakistan continued to implement strict measures against the militants.

India can certainly help Pakistan in case it stops terrorism from its territory, stop raising Kashmir issue at international forums and give India Most Favoured Nation’s (MFN) status which is mandatory for all the 164 member countries of the World Trade organisation (WTO). India granted MFN status to Pakistan in 1996, just a year after the formation of the WTO. Pakistan refused to do so till Kashmir issue is resolved. In February 2019 at least 40 Central Reserve Police Force (CRPF) personnel lost their lives in a dastardly suicide bombing attack in Pulwama, the Indian government immediately withdrew “Most Favoured Nation” status to Pakistan. Hence, India’s decision would significantly hit Pakistan’s exports to India, which stood at $488.5 million (around Rs 3,482.3 crore) in 2017-18 as it has drastically increased the prices of its goods in Pakistan. 

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The views expressed are of the author and do not necessarily represent the opinions or policies of the Indian Defence Review.

About the Author

Col (Dr) PK Vasudeva

is author of World Trade Organisation: Implications for Indian Economy, Pearson Education and also a former Professor International Trade.

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